What's a Trade Dollar?

Trade Dollars represent an odd branch of US coin collecting. The coins were not intended for domestic use, and they were only made for thirteen years. They are quite beautiful to look at, but they are not counted among the most successful products of the US Mint.

By the mid-nineteenth century, American merchants had developed a lively trade with China, and other areas in the Far East. Though profitable, Americans were at somewhat of a disadvantage in this commerce because of the coins they were obliged to use.

Chinese trade was conducted using large silver coins - coins of known weight and purity. For more than two centuries the 8 reale coins of the Spanish American New World colonies, notably those made by the mint in Mexico City, were highly favored.

To get these coins for use in the China Trade, American businessmen had to buy them at a premium. This additional cost lowered profitabiilty - a major irritant and restraint for Americans engaged in this important trade.

The US government, responding to this need (and also to that of domestic silver interests being pummeled by a declining silver market), passed legislation authorizing a US trade coin - the Trade Dollar shown at the top of this page.

One factor was that they were somewhat misleading... The US trade coin was heavier than a regular US silver dollar at 420 grains instead of the normal 412. It was even heavier than the Mexican coin of 416 grains so favored in China.

The problem was in its "fineness", that is, the ratio of pure silver to alloy used in making the coin. American silver coins were made to a .900 fine standard (90% silver). But this was a lower standard than the Mexican coins of the same period, which, although less in weight, was a coin of greater purity.

US Trade Dollars were accepted in China, but at a discount. So much for meeting the needs of American traders!

By 1879, only proof (collector) versions of the Trade Dollar were being struck, and in very small quantities. In 1885 the last US Trade dollars were struck, and the existing coins were allowed to circulate within the US. Those that had circulated in the Orient bore the chopmarks of Chinese merchant houses that verified their intrinsic value in the Far East trade.